Remick Capital, LLC Ben Hacker Oregon State University - Investment Club October 21 st, 2008

Who Am I? OSU Alum – Class of 2004 Major: Electrical Engineering Minor: Business / Finance Have worked for Intel since 2004 Passed Series 65 (Investment Adviser Law Exam) in 2006 Founded Remick Capital, LLC at the end of 2006 Single Person LLC Currently manage money for ~15 clients AUM over $500k Remick Capital is a Registered Investment Advisor (RIA) Discretionary Investment Account management Asset based fee or pure performance fee based Not a hedge or mutual fund Regulated by the Oregon Securities Division 10/17/2015Remick Capital, LLC – © 20082

My Investing Approach Value Based Approach Value investing does not mean you buy only low P/B or P/E Value investing implies only ‘Valuation’ - and (most importantly) buying at a discount Generally Moderate Turnover Focused Portfolio (Top 5 stocks usually 75% of holdings) Try to buy only my best ideas Hold Cash When You Run Out of Ideas Investing shouldn’t be forced; have patience Independent Analysis Do your own analysis and Ignore the crowd (or better yet, take advantage) Stand by your convictions Admit to yourself quickly when you are wrong and learn from it 10/17/2015Remick Capital, LLC – © There are many paths to investing success. This is my way, but you may find a different one. There are many paths to investing success. This is my way, but you may find a different one.

My Investment Process Step #1 – Idea Generation Screening (primarily quantitative – looking for outliers) –Low P/S, P/B, P/E and High ROA, ROIC –High Insider Ownership –52wk low, 52wk high  What’s hated? What’s loved? Follow good money managers (never be ashamed to leverage others’ work!) –S. Klarman, W. Buffett, G. Greenberg, and B. Berkowitz. What are they buying? –Always remember that form 13HR SEC reports only show a % of reality for a manager… –Can sometimes find very interesting ideas… Spend time thinking about business in general, what are good kinds of business –Everyday you spend money; understand where it goes and who makes a profit –Probably 10 decent investment ideas on your way to school/work if your eyes are open –This step will help keep you away from fad investments… Step #2 – Filter out the crap Out of every 100 businesses that look interesting you will probably toss out 90 Do this quickly; bad management, flawed biz model, etc… just move on to the next You’ll certainly miss some good investments, but this is a numbers game 10/17/2015Remick Capital, LLC – © Now the hard part…

Due Diligence Step #3 – Figure out if it’s a diamond in the rough or a piece of crap Read K’s, Q’s and proxy statements for the last few years –Don’t just look at earnings and cash flow; make sure you understand the balance sheet Follow the money –Has management delivered before? Do they have skin in the game? –How is their pay structured? Does it make sense? –Who are the big owners? Anything suspicious? Anything positive? –What about debt vs. equity… examine the capital structure Competition –Who are they? What are the advantages of each competitor? –Valuations should always be compared; what is the market saying about companies/industry? –Read as much as you can about the industry Ok, so things are looking good… strong competitive position, good management. –What is a reasonable range of values you think the equity/debt is worth? –How fast will this value grow? –Does this business have risk that correlates with your other investments? If all signs are good, buy at a reasonable discount to the low end of my value range 10/17/2015Remick Capital, LLC – © A pretty simple process… but not necessarily easy to execute on. Always remember you can never know everything. A pretty simple process… but not necessarily easy to execute on. Always remember you can never know everything.

That’s My Process… Here’s Some Advice I believe this advice is mostly universal regardless of your investment process: Keep learning –If you don’t know more about investing next month than you know today; you’re done Share ideas and learn from others but be sure you think for yourself Admit mistakes quickly (and of course, learn from them) If you must use margin leverage, be very careful… the future is never quite like the past Don’t underestimate the inescapable truth that markets are very efficient (but not 100%) Never compromise your ethics. Ever. –It’s a small world and word of mouth is the best (and worst) advertising Investing is about maximizing your real, after-tax, risk-adjusted return –These 3 points may have different meanings to people, but it’s a truism… –Investing is not about looking sophisticated or making more money than your neighbor. Make sure you track your performance accurately –Understand the implications of IRR, TWIRR, etc Know market history very well. Do not be surprised by something that is not surprising. –Japan’s entire small capitalization equity market trades at ~0.3 times sales today. –Their real estate market fell for 15 years in a row starting in the late 80’s –Could this happen here? Why or why not? Don’t predict but definitely prepare… 10/17/2015Remick Capital, LLC – © 20086

Questions?? What do you want to know? Portfolio Construction? Risk Management? The business aspects of managing money? AIG, Freddie/Fannie, Lehman, etc? Worldwide debt implosion? Deflation vs. Inflation? Questions about dealing with clients? Etc… Ask away… While you’re thinking; here are some of my favorite research locations: (you better know this…) (bond/preferred tool) (screener) Library (if they have Value Line…) For more about me and my process  10/17/2015Remick Capital, LLC – © 20087

Some Amazing Charts and Stats Statistics and the Media Lots of things happening outside of the US that are highly relevant to markets that are left unmentioned. Example: UK mortgage market originations: –In August 2007 = ₤7 Billion. In August 2008 <₤200 Million. Down 97+%. Virtually no housing transactions taking place in the current market. Example: What is the GAAP EPS Trailing P/E of the S&P500? 10, 12, 13, 16, 20? –18 times based on S&P actual trailing data. Also 18 times based on S&P forward estimates. Beware of stock market focus vs. credit market focus – they are related Much more money in credit (bond) markets than stock markets. –Many equity investors feel they can ignore the credit markets. They are very wrong. Don’t ever forget that stocks (individually) are only worth the profit that is available after paying bond/preferred holders. Very fundamental, but rarely discussed... Interest rates on all debt (save treasuries) has risen. This will have an impact on corporate profits. 1 hour a week thinking about this will be well spent. Interesting charts on the following pages… 10/17/2015Remick Capital, LLC – © 20088

Economic History 10/17/2015Remick Capital, LLC – © 20089

Economic History Cont… 10/17/2015Remick Capital, LLC – ©

Economic History Cont… 10/17/2015Remick Capital, LLC – ©

Backup 10/17/2015Remick Capital, LLC – ©

Firm Organization 100% owned by Ben Hacker Registered in State of Oregon 10/17/2015Remick Capital, LLC – © Remick Capital, LLC Registered Investment Advisor (RIA) Remick Capital, LLC Registered Investment Advisor (RIA) Ben Hacker Investment Advisor Representative (IAR) Ben Hacker Investment Advisor Representative (IAR) Remick Capital has one representative Remick Capital is synonymous with Ben Hacker